Morgan Stanley faces civil rights lawsuit

The National Community Reinvestment Coalition on Monday filed a civil rights complaint against Morgan Stanley, alleging the investment bank discriminated against minorities seeking home loans.

The complaint claims that Morgan Stanley's Saxon Mortgage unit purposely denied credit to ''predominantly African American, Latino, Native American, Asian and Pacific Islander communities'' in the U.S. It was filed with the Securities and Exchange Commission and U.S. Department of Housing & Urban Development.

NCRC said Morgan Stanley's lending policies prevent borrowers whose homes are valued at less than $100,000 from obtaining loans. The investment bank also denies loans to residents of Puerto Rico, Guam and the Virgin Islands, while also prohibiting lending to Native American communities, the group said.

A Morgan Stanley spokesman could not immediately be reached for comment.

Washington, D.C.-based NCRC, which promotes equal access to credit and financial services to underserved communities, in July said in a study that higher income does not protect blacks and Hispanics from receiving mortgage loans with above-market rates.

The report, released in July, concludes that in 2005 blacks in 171 metropolitan areas were at least twice as likely as whites to receive expensive loans.

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